HRA Administration for Small Business - HRA Plan Docs

Three weeks ago, we told you about the executive order the President signed (in our blog post Executive Order Seeks to Expand Use of HRAs ). The order asked the Departments of Treasury, HHS and Labor to explore how they could allow more businesses to use Health Reimbursement Arrangements (HRAs). Today, the Internal Revenue Service (IRS) issued Notice 2017-67 .  This notice provides long awaited guidance on the qualified small employer health reimbursement arrangement (QSEHRA). The QSEHRA plan is a great small business alternative group coverage. The plan was welcomed when it was signed into law in 2017 and, it overturned guidance previously issued by the Internal Revenue Service and the Department of Labor that stated that HRAs violated the ACA’s market reforms, subjecting small employers to a penalty for providing such arrangements. In this post, we will cover the notice in detail. What it means moving forward and its impact on existing plans. The Notice Today’s 59...

Our software does the initial notice for you. Employers offering a QSEHRA are required to provide all eligible employees with a notice that includes the following: The employee’s permitted amount for the year; An instruction to provide that information in any application for an Affordable Care Act (ACA) exchange premium subsidy; and A warning that the employee may be taxed under the ACA’s individual mandate, and owe income tax on QSEHRA reimbursements, unless he or she obtains “minimum essential coverage.” The IRS waived the notice requirement for 2017. For 2018, the notice requirement in in place. Our clients are pleased to know HRA Plan Docs creates the notice and delivers it with your plan documents, ready to distribute. We also provide clients with a "fillable" employee notice for new hires. The employee’s permitted amount for the year. The initial notice is distributable to all employees that will be eligible on the first day of the plan. For ne...

QSEHRA contribution limits for 2018 It is always amusing when the Service has a statutory deadline, like the October 1 deadline to provide QSEHRA participants written notice of their benefit, and releases helpful information weeks after said deadline. The IRS released the 2018 QSEHRA guidelines through Revenue Procedure 2017-58 on October 19, 2017. Luckily, HRA Plan Docs computed the increase from CPI in August so our clients were able to provide accurate employee notices. The 2018, QSEHRA contribution limits increased $200 annually for self-only employees and  $250 annually for employees with a family. An increase of roughly $16.66 per month for self-only employees and $20.83 for employees with a family. See the chart below for details: The maximum monthly allowance for 2017 Plans Employee Only $412.50 Employee w/ Dependent(s) $833.33 The maximum monthly allowance for 2018 Plans Employee Only $420.83 Employee w/ Dependent(s) $854.17

The New HRA for Qualified Small Employers The passage of the 21st Century Cures Act in December of 2016 minted a new HRA benefit, the Qualified Small Employer HRA. The law was essentially a compromise between lawmakers, who understood that small businesses that did not offer traditional group health benefits wanted to provide a non-traditional health benefit, and the Departments of Labor and Treasury, which had issued coordinated guidance in 2013 effectively barring small businesses from using existing tax law under 26 CFR 1.105-11 for tax free reimbursement of medical expenses if the plan had two or more eligible participants. The Departments contended that “old” Section 105 plans were “group health plans” and therefore subject to the ACA’s “market reforms” which apply to all group health plans. To bypass the ACA, congress wrote the “new” law, forming the QSEHRA, under 26 U.S. Code §9831, exceptions to group health plans. The Same but, Different The reimbursement p...

Executive Order Signing On October 12, 2017, the President signed an executive order asking the Departments of Treasury, HHS and Labor to explore how they can allow more businesses to use Health Reimbursement Arrangements (HRAs). How does this affect the QSE-HRA and how should you plan for your small business? Until guidance is issued from the departments, there is no impact on Qualified Small Employer HRAs. Current regulatory requirements have not been changed by the executive order. We at Plan Docs anticipate a roll-back of the guidance provided under IRS Notice 2013-54 and Technical Release 2013-03, which subjected Section 105, Self Insured Medical Reimbursement Plans, commonly referred to as HRAs, to the “market reforms” of the ACA. Should this guidance be repealed, HRA Plan Docs is prepared to immediately offer Section 105 plans for small businesses. Moreover, we will provide existing clients the option of transitioning from the QSE-HRA to a Section 105 plan at no ch...